The government will likely require Toyota and Mitsubishi to add at least one model each for local assembly under the Comprehensive Automotive Resurgence Strategy or CARS program, in exchange for the two automakers’ request for an extension.
Toyota Motor Philippines committed to locally assembling 230,000 units of the Vios under the CARS program
According to a report by the Manila Bulletin, Board of Investments (BOI) Managing Head Ceferino Rodolfo said that the two CARS participants have already met with Trade and Industry Secretary Alfredo Pascual, who also serves as BOI chairman.
The two automakers filed for a three-year extension with the government, citing the effects of the COVID-19 pandemic which reportedly disrupted their operations. Rodolfo says that both are still finalizing their respective offers, adding that Pascual would like them to give back in the form of added value, such as assembling another model.
“If we extend, what would we get in return? For example, do we include additional models in the program? That is still under discussion,” Rodolfo said. “The CARS participants already put in the fixed investments (of Php 9 billion each). It’s not just the two registered participants. It also includes their parts suppliers.”
Mitsubishi Motors Philippines has until 2023 to fulfill its commitment of 200,000 units for the Mirage and Mirage G4
He adds that if the extension is approved, no further incentives or additional government budget will be allocated for the participants. The government initially earmarked Php 27 billion in fiscal incentives under the program.
“The DTI fully understands the impact of the pandemic on all industries, particularly on the automotive industry. The demand was really hit as well as their supply chain,” Rodolfo noted.
Under the CARS program signed in 2015, both carmakers pledge to produce at least 200,000 units each spanning a six-year period, with body shells and large plastic components to be produced locally.
Electric vehicles are not likely to be included in the CARS program for now
Mitsubishi applied for the program with the Mirage/Mirage G4 subcompact models and has been given until 2023 to comply. Meanwhile, Toyota enrolled its Vios subcompact sedan for 230,000 units, with a deadline set for 2024. Philkotse has reached out to both automakers for comment, and we will update this page once they have responded.
Rodolfo said that the proposed inclusion of electric vehicles (EVs) under the CARS program has been largely ruled out. “I am not expecting (a third participant) because this CARS program has been around a long time,” he remarked, adding that the proposal will have to be consistent with Republic Act 11697 or the Electric Vehicle Industry Development Act (EVIDA) which lapsed into law this year.
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